Steel package down to wire

The federal government will have to prove its $300 million assistance to steel makers isn’t just lining the pockets of
BlueScope Steel
and
OneSteel
to get critical support from the Greens in both houses of Parliament.

The Greens will discuss the steel package at a meeting in Canberra today. Lower House Greens MP
Adam Bandt
said he would have to be convinced about how the assistance would protect jobs and help the environment for it to gain support in the lower house vote tomorrow and the Senate next month.

“We are considering our position on the bill and will discuss it at our party room tomorrow," Mr Bandt said. “If the government now wants this bill passed, the Greens will need to be convinced that any multi-million dollar industry package will protect local jobs and improve the environment, not just line the pockets of already wealthy companies."

Climate Change Minister
Greg Combet
said he had been in discussions with independent crossbenchers and was confident the climate legislation package, including the help for steel, would pass through the lower house tomorrow.

“I’m working on that, but we expect it to pass," Mr Combet said when asked if he had enough cross-bench support in the lower house for the steel package.

“Our industry, to survive, needs to modernise and it needs support from the government to do that."

Tasmanian independent
Andrew Wilkie
said last night he would support the steel industry package, which includes assistance and competitiveness assistance advance payments. The Senate will vote on the entire climate package when the upper house holds a special sitting in the week starting November 7.

The steel assistance was announced as part of the government’s carbon tax, which will charge the top 500 polluters to reduce emissions and combat global warming.

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The government will charge companies $23 per tonne from next July and move to an emissions trading scheme in 2015.

The steel moves were not agreed to by the Multiparty Climate Change Committee, including independents
Rob Oakeshott
and
Tony Windsor
as well as the government and the Greens.

So, while the bulk of the climate package should pass with the support of the independents and the Greens, the steel assistance is a measure from the government.

The Steel Institute of Australia, Australian Industry Group and steel makers have stepped up pressure on the government over recent months to save jobs in manufacturing since the steel industry announced job losses of almost 2000.

Prime Minister
Julia Gillard
gave $100 million in emergency assistance to
BlueScope
after the company cut 1400 jobs, allowing it to bring the payment forward to 2011-12 to address cash flow issues.

BlueScope said in a statement to the ASX on July 11 that it would get 60 per cent of the $300 million, distributed over five years from 2012, with the remainder going to OneSteel.

“The STP legislation and regulations are yet to be finalised but the government has worked with the Australian steel industry to achieve an outcome which recognises it is trade exposed and that international competitors are not currently subject to such a tax,’’ BlueScope Steel chief executive
Paul O’Malley
said after the package was announced.

The Productivity Commission will review the treatment of the steel industry in 2014-15 and three years notice will be provided of any changes to assistance. Companies can also ask the commission to review the impact of the carbon price.

Mr Combet said the government had not yet decided on running extra advertising about the measures.

“There’s no plans for that at this time, the government advertising has all been conducted," Mr Combet said. “There may be future advertising but no decision has been made about that."